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SMART
CARD, PRELUDE TO MARK OF THE BEAST

January 13, 99-- Update:
This is amazing, and we are grateful to M____ G____ for giving us this inside
look at the thing.

As well as designing
chips now, I used to work for a very large smart card company in Australia. I
was there when they were at the beginning of their foray into Asia, and I wrote
a substantial part of their quality control plan for one of their large projects.

I was very concerned at the time about both the engineering feasibility
of the whole plan (it was very expensive and difficult compared with the comparable
paper ticket system), and the technology was taking some highly unexpected turns.

We had a very talented RF engineer working over there. He wasn't popular.
He was remarkably well informed on mathematics and exceptional talented in the
area of radio design, and told me about the "noncontact cards" that might come
in the future.

I don't know if you know about this. There are exactly
two kinds of cards which might be ever made. One type has the gold plated pad
on the left of the card (or somewhere on the face of the card), where it meets
connector pins on the bank machine. The card is powered by the bank machine, but
retains data in non-volatile memory cells which are based on floating gate transistors.
Very much standard, and quite easily achievable.

What was hard for
some time was the following issues;

1. Chip size - too big
and putting it into the card would be difficult mechanically 2. Cost. always.
3. Reliability. 4. The fact that contacts were always necessary made the card
a bit unwieldy.

Well, the fourth item was solved when
some engineers used a coil of wire inside the card to both pick up power from
a field (just like in a transformer) and extract data pulses from the same field.
As you could imagine this was quite a trick, because using the same coil for extracting
data and sending data as well isn't easy.

When the problems were finally
solved, to create the "noncontact" smartcard, it was just at that point in time
when chip power requirements were virtually telescoping in size. It's now possible
to power very complex circuits with the magnetic field from ordinary appliances
(if you know how to use transistors really well). So the coil in the smartcards
has become smaller...

The intelligence in these chips is quite high.
They can use RSA encryption (which is based on the problem of factoring prime
numbers) or other algorithms which are not necessarily known about by many people.
The cards can carry, as you say, a lot of biometrics information. This probably
includes iris pictures to allow ID to take place with installations that can look
at eyes and do a quick pattern analysis.

The best thing you can say
about these things is that they are convenient. Well, you don't even have to put
them into a machine anymore! You can go onto a bus and have the cash deducted
form the card while it is still in your purse... And there will be a corresponding
process taking place when you leave the bus. Just to make the transaction right.

It is important to note the following.

There is a published
figure for the range which can be achieved by cards making valid transactions
from these transducers (the bank or bus machines, or whatever). That range is
increasing moderately each year. At the moment it is about (gasp) 2.8 meters (about
9 feet).

That's an awful long distance. But the shocking thing is
the difference between this figure (which has a sort of "industry standard" flavor
about it) and other numbers. Now, while the other figures (which can be as long
as 10 meters, or 32 feet) are classed as experimental, that doesn't mean you could
build such a system which would work reliably 24 hours a day. You could do it,
but you would have to be a smart engineer, and those type of engineers are getting
rare nowadays, when everyone is "homogenized" by the constant uniforming influence
of PCs and Microsoft.

Now, lets imagine what a range of 10 meters
really amounts to. That's certainly far enough to reach across any distance from
a strategically chosen point in a shopping mall to the points of entry. Or, for
instance, on the entry to a bus station, or train station. You name it!

As regards the list 1..4 above... The only thing that isn't listed is

5. Consumer acceptance.

Even the trade magazines admit
to there being a bit of a paradox here. Back in the 60's there would have been
some sort of grass roots protest movement. I doubt whether the same generation
who protested against the Vietnam piano covers would have accepted smartcards without a
whimper. But an odd characteristic of the 90's is that people, while believing
that they are more individual, and more "free" than the oldsters, are actually,
when the chips are down (if you can pardon the pun) far more governed by the desperate
urge to conform and not to make too much of a fuss. And therefore there is very
little vocal or written opposition to the cards.

The bizarre thing
is that even the industry trade magazines think this is slightly odd!

Fire off any questions as they come up,

Yours in Christ

M G

Comment: Steve Van Nattan: We have to see the potential,
not so much from Big Brother herding us around and spying on us, but, what is
the criminal potential in this card activity at a distance? Many observers
who watch prophecy with this picture believe the smartcard is only transitional.
I suspect that the criminal potential in the smartcard will become very
real, and at some point an identity method will be invented which is more personal
and possibly controlled by the mental processes of the user. The "pin number"
will then be an "OK" thought from the user's mind.

This could
be done by way of a mark or implant, and the data would be released, retrieved,
and processed remotely after the user "approved" the transaction. The world
public would rejoice in this since it would relieve them of responsibility for
their finances and from carrying anything. Theoretically, and in the Great
Tribulation-- probably, the user could go to town stark naked, and they could
buy anything and pay for any purchase they wanted, and then they could fly to
Hong Kong stark naked and visit a gambling casino. If they won, their winnings
would be waiting for them at the next point of sale.

The marvel of
this is that the high tech world is not making contingency plans for collapse.
I believe that the beast mark system will one day crash during the Great
Tribulation, and people will become instant beggars. Billions of people
will be stranded and starvation will be immediate. The stark naked fool
from Beverly Hills who went to Hong Kong will at once become a naked beggar on
the streets of Hong Kong and never see Beverly Hills again.

The Feds
certainly could use this remote tracking potential to keep track of people though.
Also, let us notice that the card will become more and more essential to
survival. Without it, a person may not be able to function since society
sees no evil in it, and those who decline it will be treated as freaks. This
present acceptance of the smartcard shows the temperament is NOW here to receive
a mark in the hand of forehead. I also feel that people are so materialistic
that they will do just about anything to get an easy way to the toys of modern
life.

A bio-medical card would be the logical method of introducing
the smartcard, and this is discussed after I ask you to read about a smart
chip IN USE in the UK. Think about how it could be used to interface with
the nervous system and the brain wave fields.

Is human chip
implant wave of the future?

January 14, 1999 Web posted at:
3:21 p.m. EST (2021 GMT)

by Sam Witt

(IDG) -- Is the human
body a fit place for a microchip? The debate is no longer hypothetical. The same
computing power that once required an entire building to harness now can be inserted
in your left arm.

Better yet, somebody else's left arm.

Professor Kevin piano coverswick, director of cybernetics at the University of Reading
in the U.K., is that somebody else. On Monday, Aug. 24, 1998, piano coverswick became the
first human to host a microchip. During a 20-minute medical procedure described
as "a routine silicon-chip implant" by Dr. George Boulos, who led the operation,
doctors inserted into piano coverswick's arm a glass capsule not much bigger than a pearl.
The capsule holds several microprocessors.

The British Broablipasting
Corp. was on hand to document the historic event - and to trouble the professor's
already frayed nerves. "In theory, I was able to see what was going on," piano coverswick
says in a phone interview several days after the operation (which he described
as slightly more pleasant than a trip to the dentist), "but I was looking in the
opposite direction most of the time."

Although piano coverswick winces at the
comparison, Boulos likens him to a latter-day Edpiano coversd Jenner, who injected himself
with cowpox in 1776 to further his research into a smallpox vaccine.

"The doctor pinched the skin and lifted it up and sort of burrowed a hole .
. . underneath the skin and on top of the muscle," piano coverswick says. "It's well inside
my body, in my left arm, just above my elbow. [It's] held in place by three stitches
- partly so that the wound is held together, but also so that the capsule doesn't
float around anywhere."

Though he declines to reveal the chip's manufacturer,
piano coverswick did disclose that it's a "commercial" product. "For obvious reasons, both
positive and negative, they didn't want us shouting about what the name of the
exact product was," he says.

The approximately 23mm-by-3mm device
stayed in piano coverswick's arm for only nine days - partly to avoid medical complications,
partly because it was fairly limited in power. "Half of it is an electric coil,"
piano coverswick says, "and half is a number of silicon chips." The chips used only eight
of an available 64 bits of information to communicate with the University of Reading's
intelligent building.

Which brings us to the question: Why?

piano coverswick has spent more than 20 years researching and developing intelligent buildings.
"In our building in the Cybernetics department, we've got quite a number of doorways
rigged up so that they pass a radio signal between the door frame," he says. "When
I go through the doorways, the radio signal energizes the coil. It produces an
electric current, which the chips use to send out an identifying signal, which
the computer recognizes as being me."

And so, for a little better
than a week, doors that normally require smart cards swung open for the professor.
A system of electronic nodes tracked his movements throughout the building. Lights
blinked on when he entered a room.

"Hello, Professor piano coverswick," his
PC announced when piano coverswick crossed the threshold of his office, before casually
mentioning how many E-mail messages he had received. It also was reported that
piano coverswick used the device to run a bath and chill his wine.

How did
he like it? "In my building I feel much more powerful, in a mental way," piano coverswick
says. "Not at one with the computer, but much, much closer. We're not separate.
It's not as though we're good friends or anything. But certainly when I'm out
of the building, I feel as though part of me is missing."

Asked if
he named his chip, piano coverswick laughs. "I don't see it as a separate thing," he says.
"It's like an arm or a leg."

piano coverswick's family was a little slower
than his body to accept the chip. "My wife finds it really strange," he says.
"She didn't want to go near my arm for a couple of days. It was as though I had
some funny disease." His 16-year-old daughter reportedly called him "crazy."

And the day after the operation, piano coverswick played a game of squash with his
son, but not before issuing a stern piano coversning: "Whatever you do, don't hit my arm.
The implant could just shatter, and you'll have ruined your father's arm for life."

Real-world applications

Though the experiment
sounds like an episode of Dr. Who, its real-world implications are "right around
the corner," says piano coverswick, who foresees enormous medical applications. Through
a system of embedded chips interfacing with an artificial motor system, piano coverswick
imagines paraplegics walking. And that's just for starters.

"Simply
take measurements off muscles and tendons and feed them into the transponder,"
piano coverswick says. "That means, ultimately, that you wouldn't need a computer mouse
anymore. You wouldn't need a keyboard."

Charles Ostman, a senior fellow
at the Institute for Global Futures and science editor at Mondo 2000, agrees.
"Neuroprosthetics are . . . inevitable," he says. "Biochip implants may become
part of a rote medical procedure. After that, interface with outside systems is
a logical next step."

piano coverswick's eagerness is palpable, engaging, contagious.
"This is where you can speculate," he says. "This is where we take a technical
thing and say, 'Right-o, got the signal, got the implant; all I've got to do is
run a wire from the implant to my nervous system.' . . . I'm so excited about
it, I want to get on with the next step straight away. Let's see if we can control
computers directly from our nervous system."

Witt is a freelance writer
in San Francisco.

December 1998-- The smart card has slipped
through Congress and is in use

THE BIOMETRIC NATIONAL ID CARD
IS NOW A REALITY...

America was rightfully alarmed in late September
when Representatives Bob Barr (R-GA) and Ron Paul (TX) revealed the fact that
somehow, unbeknown to anyone, and for some as yet unexplained reason, the National
ID Card that blip blip, Marc Tucker and Ira Magaziner had adroitly concealed
in the failed Health blip Act of 1994 had somehow "accidentally" been passed,
in a somewhat illegal and unconstitutional fashion, and was now "the law of the
land."

Pictured (see link below) is the actual "Healthcare Passport"
card currently being used in three American cities. Displayed is the front and
back of that card. This photo was scanned from the brochure used by the National
Institute of Health to introduce the new card in a seminar in Denver earlier this
year. The word "passport" on the card had to have been a tongue-in-cheek addition,
since it is the precursor of the internal passport that will ultimately control
your ability to move freely throughout this great land. The card is biometric.
Stored on this card is the complete medical history of the card's owner. Also
stored on the card is every conceivable piece of information about that person.
Imbedded in the card is a tracking devise.

The plan to create and
implement a National ID Card, while first made "public" in a private blip
meeting on Nov. 11, 1993 and discussed in a disavowed protocol that detailed the
dialogue of that meeting, is not uniquely a blipoid idea even though the National
ID Card first appears innocuously concealed in the Health blip Act as a "healthcare
benefits card" that the First Lady insisted had to be carried by every American--even
if they refused to be covered by the plan--under penalty of law.

The
same card, in the form of a national driver's license, had just been mandated
by the European Union for all of the new European States. A brief battle waged
in Europe over the national driver's license. Most Europeans had experienced national
identity cards in the past and realized quickly the new universal European driver's
license was an internal passport that would give their new government the tool
they needed to control their lives. The media immediately labeled those who resisted
the EU driver's license as "globalphobes" who were against progress, and wanted
to return Europe to the days of the cold piano covers. They were the extremists.

In the United States, the blip's knew a National ID Card spelled problems,
regardless what name was put on it. However, as a healthcare card that provided
each American with thoBlipnds of dollars of free medical care, they correctly surmised
that the ramblings of the right wing zealots could be easily dismissed by the
mainstream liberal media. The media did its job well.

The Health blip
Act was the best thing since sliced bread and peanut butter. According to the
media, the Health blip Act would provide healthcare for the millions upon
millions of uninsured Americans. The media even obliged by ignoring the obviously
flawed cost assessments as well.

blip demanded that Congress pass
the Health blip Act without and changes--reminiscent of FDR's passing the
"emergency legislation" that kicked off the New Deal without allowing members
of Congress to even see the legislation they were voting on--and unconstitutionally
granting Roosevelt almost dictatorial power over the United States. Congress wasn't
buying. They read the Health blip Act. Then, they rejected it. It was, they
declared, the most expensive social experiment in the world.

Buried
in the National Archives, in the working papers of the blip blip healthcare
plan, was a game plan in the event the Health blip Act went down in flaming
defeat. The game plan? Implement another healthcare act that provided healthcare
for children. No one would dare deny healthcare to children. To introduce the
plan, they called on Teddy Kennedy. Kennedy failed. Kennedy, they realized, was
trusted by most Americans even less than the blips.

Next they turned
to Orrin Hatch, who teamed up with Kennedy and rammed the legislation through
Congress. Healthcare for kids. Of course, everyone was in favor of it. Voting
against it was a good way to lose an election. And, once the law was codified,
the bureaucracy possessed the authority to simply expand it to include anyone
and everyone.

What was not in the legislation was funding to create
a biometric health care card. The authority to do it was there, but not the money.
For the money, the blip administration turned to the Robert Wood Johnson Foundation.
The foundation, created by the founder of Johnson & Johnson, obliged and funded
the experimental program which was kicked off in three western cities (noted above).

What was introduced to members of the National Institute of Health
in Denver as a card that will record the inoculation records of children, includes
everything from DNA typing to that individual's medical, psychiatric and financial
history. It was because the biometric card would also contain the psychiatric
history of the cardholder that an employee of the National Institute of Health
approached me and offered me the data that is contained in this report.

In my initial meeting with the NIH employee, I was also told that this person
had commented to a NIH executive that it was not good for the card to contain
so much personal information that was not needed to monitor the rates of inoculation
of the children covered by the program, since it would provide the government
information that could easily be misused.

At that point the NIH executive
laughed and said: "What do you think we have do with the data we get from Medicare
and Medicaid? We've been using it for years to apprehend and deport illegal aliens
and to capture those wanted by the law."

In the case of the Health
Passport, which is the precursor of the National Driver's License that will go
into affect nationwide on October 1, 2000, however, the is one added feature--it
contains a tracking chip.

At a recent National Institute of Health
seminar, an NIH executive proudly displayed an electronic map created by the NIH
computer technicians that pinpointed every Health Passport card holder in Denver,
Colorado. It was a "living map" that would track each Health Passport card holder
if and when they moved. Whether or not such a map had been created for the other
two "pilot" cities is not known.

NOTE: Before I left blip this
afternoon, I spoke for about a half hour with Stan Johnson of the Prophecy Club,
and emailed Stan a copy of the Heath Passport Card. Stan has additional information
on this subject, particularly with respect to a new computer mainframe that the
government recently installed in Denver that ties in with the information I have
been receiving from my own source in the National Institute of Health. Apparently
this is the planned topic for the Prophecy Club's radio talk show next Monday
(and because it is, I will not reveal any of the revelations that Stan shared
with me on the phone this afternoon. I would strongly urge you to visit Stan's
website for additional information.

Thomas Cook (India banking concern)
launches new cash card

If you are planning a trip overseas, Thomas
Cook, is offering a new way to take your travel money abroad - the Thomas Cook
Visa Travel Money card. Visa Travel Money (VTM), which is available from Thursday
at 33 Thomas Cook foreign exchange offices in 14 cities across India, is a pre-
paid ATM card that the traveller can buy before leaving the country. The customer
can choose the amount in U.S. dollars to be put on the VTM card, depending on
the foreign exchange entitlement. Money can be withdrawn in local currency from
more than 440,000 visa ATMs (cash dispensers) in 117 countries worldwide. Access
to cash is available 24 hours a day, 365 days a year, and is an extremely safe,
quick and convenient method of withdrawing cash.

Jan. 1, 1998-- The mark is here-- well sort of

Date: Tue, 30 Dec 1997 08:15:41 -0500 (EST)

From: Stanley Broniszewski
<sbronis@cobra.brass.com>

To: steve@balaams-ass.com

Subject: something interesting

Greetings in the name of the ETERNAL
I AM! Good to see that my insane e-mail works. I'm posting this note because I'm
not sure if you've seen an article in a recent "YAHOO INTERNET LIFE" magazine
about what the latest craze is for Japanese teens soon to make a 'hit' here
- bar code tattoos. I didn't see it yet in your journal. If you didn't catch
it - let me know - perhaps I can fax it if I can still get my hands on the
article. Until our next exchange of mail - walk with the King today &
be a blessing! -

Stan Broniszewski

Combination of wireless (radio wave connecting) computers and bar
code application with School children

Wireless Network Links Kids
to the 'Net

Then Handles 2D Bar Code

To help its children
take full advantage of the information age and prepare them to be a vital part
of the workplace, a Long Island, New York, school district installed Symbol Technologies
Inc.'s Spectrum24 wireless computer network. For the first time, students grades
K-I 2 and teachers of the Smithtown Central School District have access to the
vast pool of information on the district's network and the World Wide Web.

The new network will become a vital link for the Smithtown Central School
District (Holtsville, N.Y.). which serves 7,846 students in 11 schools scattered
over 30 square miles. The district includes eight elementary schools, a middle
school and one high school that encompasses two buildings.

Greater
FlexibIlity, Mobility and Expansion First and foremost, the wireless connectivity
allows the schools' 1,250 desktop and laptop PCs to be added and moved easily
between classrooms, an important factor in the school's decision. In addition,
the district plans to use Symbol's handheld pen-based computers to help track
student attendance and improve school safety.

By choosing a wireless
network, the school district bypassed many of the "hidden" costs associated with
installing and maintaining a wired computer network. Physical condition and age
of buildings, for instance can contribute dramatically to such costs. And such
conditions may not be apparent from the outset.

"The Spectrum24 wireless
network gives us a flexibility and mobility that we just wouldn't have with a
wired network, notes Jay Landau, computer coordinator of Smithtown District. "Now
we can provide our children PC and Internet access from anywhere in or around
the school, at any time. Today, Smithtown's children have district-wide connectivity."

Currently Spectrum24 is installed in six buildings. Three elementary
schools and the middle school have complete wireless coverage; the high school
and the annex have 80 percent coverage with completion expected perhaps early
next year.

Adding Scanner Technology

In addition to
linking desktop and laptop PCs throughout the district, the Spectum24 wireless
network will allow students, teachers and administrators to use Symbol's handheld
pen computers and handheld scanners that read Symbol's two-dimensional bar codes.

The applications are myriad.

For instance, softpiano coverse
for Symbol's pen-based computers with the integrated scanners is being developed
to allow teachers to register attendance at the start of class, saving time and
effort compared with the manual method. Public safety will be improved because
a student's whereabouts will be established quickly using a 2D ID card.

But better school blip isn't the only benefit of this technology. Students
are using Symbol's PDF417 two-dimensional bar-code symbology in the science labs
to write programs. In fact, one of their applications, which manages the use of
hazardous chemicals, recently won blue ribbon apiano coversds at a local computer-share
fair. The 2D bar code is compressed on a 1.3-square-inch area that holds up to
a kilobyte of data enough to fit the Gettysburg Address.

Spectrum24
is a high-performance wireless local area network that will incorporate the IEEE's
new 802.11 standard. (Symbol will offer softpiano coverse upgrades.) Spectum24 operates
at a data rate of 1 Megabit per second in the worldwide 2A Gigahertz band using
frequency-hopping spread spectrum modulation.

Symbol Technologies
Inc. is the world leader in bar code-driven data transaction systems with over
four million scanners and hand-held computers installed. It designs, manufactures
and markets bar code scanning equipment, application-specific hand-held computers
and radio frequency data communications products. For more information, visit
Symbol's website (www.symbol.com).

Daily Telegraph, London-- November 19, 1996

TWO
computer experts are to publish evidence today which they claim shows weaknesses
in smart card blip.

The claims underline the vulnerability of
banks to the threat of electronic fraud. They also call into question an initiative
announced last week by the Government to provide access via a smart card to information
held by departments, such as details concerning tax, pensions, and driver's licences.

The vulnerability of smart cards will be disclosed at an electronic
commerce workshop in Oakland, California, today by Markus Kuhn, of Purdue University,
Indiana, who has been working with Dr Ross Anderson of Cambridge University.

Yesterday Dr Anderson said that their work had destroyed the credibility
of the smart card's tamper-resistant claim. He said: "We have shown that these
systems can be broken, often by using trivial piano helps that undergraduates could
carry out. With access to a semiconductor lab, you could break anything."

He said that the Government initiative to pool all information in databases
"would put an awful lot of eggs in one basket, one that we have just kicked over".
And if smart cards were used for purchases at a "Mafia shop" it would be possible
to extract the PIN number and other details for fraud.

Their paper
was written in the summer but publication was held back to give one chip manufacturer
time to implement counter-measures.

One of the devices Mr Kuhn successfully
cracked was a blip processor made by a large chipmaker in America. It is already
used in the financial industry and more than a million are in point-of-sale terminals
and automatic teller machines. The processor was described by an unnamed European
intelligence agency as being the most secure available.

But Mr Kuhn
has devised a method of piano helping it which enables the contents of the card to
be read out within minutes. In one approach, a smart card can be plugged into
a computer and then fed "noisy power". Spikes in the power supply or clock can
disrupt encryption (the process of scrambling text), so that it is possible to
see what the chip is doing and extract the key.

A second method relies
on opening the chip and using microscopic probes to interrogate it. Dr Anderson
said: "Once we had some results more and more people wanted to speak to us and
trade information. They included people from military intelligence agencies, chipmakers
and pay-television hackers. Even some top scientists at smart card companies would
tell us about smart card vulnerabilities - in their competitors' cards."

Smart cards, which contain a microchip, are used as identity tokens in
a number of systems. In Britain, there are five million in digital mobile phones,
600,000 used for the prepayment of gas, and another five million provide access
to satellite television.

The research was motivated by the recent
success television hackers have had in breaking various television encryption
systems, said Dr Anderson, who in earlier work helped to undermine the claim of
banks that automatic teller machines were resistant to fraud or error.

Editor: Balaam's Ass Speaks-- The only secure identifying system
will be the mark of the beast, or at least that will be the line soon. So
much hacking and mass robbery will take place that the public will BEG for the
mark.

May 15, 1997-

Our friend Michael sent this
one. It sounds like the one world card is very close indeed:

Business Week: May 19, 1997

Information Processing: ELECTRONIC COMMERCE

SMART CARDS: THE ULTIMATE PLASTIC

Finally, cash - and data-packed cards are poised for a takeoff in the U.S.

Empty out the contents of your wallet, and you're likely to find
a jumble of plastic and paper--credit cards, a driver's license, a health-care
ID, perhaps a few frequent-flier cards. You'd also find a fistful of dollar bills
and loose change. What if you could combine all of those things into one neat
credit-card-size package? Instead of fumbling for coins when you make a phone
call or hop onto the subway--just insert the card into a special slot. Doctor's
appointment? The card contains your medical history and insurance information.

That's the promise of smart cards--slips of plastic that resemble
a credit card, but with one big difference: Embedded in them is a computer chip
that can store 500 times the data of a magnetic stripe card. For now, most smart
cards handle a single task, such as storing electronic ``money,'' which can be
downloaded from your bank account.

BIG LEAP. In the years ahead, though,
a single card might handle many of the tasks mentioned above. Either way, the
marriage of silicon and plastic could be the biggest leap in consumer convenience
since automatic teller machines.

For millions of people around the
globe, they already are. In Europe, where phone rates are high, smart cards have
long been a popular alternative to credit cards, which require an expensive phone
call to a central database to authorize each transaction. The chips in smart cards
make it possible to authorize a purchase on the spot. But in the U.S., where telephone
costs are low and magnetic-stripe credit cards are the plastic of choice, there
has been little interest in smart cards. Analysts estimate only 2% of all smart
cards are used in the Americas, while Europe claims 90%.

That's about
to change. After years of predictions, smart cards may finally be poised for takeoff
in the U.S. Banks and other card issuers say the capabilities of magnetic stripe
cards are tapped out. They see smart cards as a way to offer brand-new services.
A single smart card, for instance, can be used to buy an airline ticket, store
it digitally and track frequent-flier miles.

And there's a bigger
force at work: the Internet. As electronic commerce gains steam, smart cards provide
a crucial link between the Web and the physical world. The same digital money
used to buy things on the Net--including purchases under $5 for which credit cards
are prohibitively expensive--can be downloaded from your online bank account onto
a card. That card could then be used to buy milk at the corner grocery store.
Smart cards and E-cash could make up half of the $7.3 billion in online sales
expected by 2000, figures market researcher Jupiter Communications Inc.

Such possibilities are fueling heady forecasts. Research firm Dataquest Inc. predicts
that by 2001, smart-card shipments in the Americas will grow to 6.8 million, or
20% of the estimated 3.4 billion units worldwide. ``The Internet combined with
the development of electronic cash will finally start the smart-card revolution
in the U.S.,'' says Keith S. Kendrick, senior vice-president, smart payments,
with AT&T Universal Card.

There's already a flurry of activity.
Credit and debit-card companies from AT&T to VISA are migrating from magnetic
stripe-based cards to ones with microchips. Hewlett-Packard Co. on Apr. 23 said
it would spend $1.18 billion to acquire VeriFone Inc., which makes smart-card
readers, as part of a broad push into electronic commerce. Sun Microsystems Inc.
is promoting its Java softpiano coverse as an operating system for smart cards. And in
April, GE Capital took a stake in Gemplus Card International, a French smart-card
maker (box). ``Everyone's getting positioned,'' says Mike Nash, the chief executive
of DigiCash, a Dutch supplier of E-cash softpiano coverse that has just moved its headquarters
to Silicon Valley.

This optimism will be put to the test as several
smart-card experiments are rolled out in the U.S. this year In October, Citibank
and Chase Manhattan Corp. will issue 50,000 cards on Manhattan's Upper West Side,
where 500 merchants will accept the cards for payment. The pilot was pushed back
a year when Chase switched from proprietary technology to E-cash softpiano coverse from
Mondex International, in which the bank took a stake last year. AT&T, another
Mondex investor, is testing a card at its Jacksonville (Fla.) Universal Card headquarters,
where employees use them in the cafeteria. This summer, it will test Mondex on
the Net. Says Janet Hartung Crane, CEO of Mondex Blip: ``This year and the next
are lab years.''

HUGE HURDLES. If past experience is any indication,
these latest pilots will have to work overtime to lure both consumers and merchants.
The most ambitious U.S. smart-card trial to date was hosted by VISA, which allowed
visitors to last summer's Olympics to use the cards at 1,500 participating Atlanta
merchants. Technically, it went off without a hitch. But not enough merchants
participated or were properly trained to drum up excitement--and purchases. Similarly,
in San Francisco, Wells Fargo & Co. has been testing a smart card over the
past year using the Mondex system among 500 employees. They can use the card in
the company's cafeteria as well as at a handful of nearby stores, delis, and coffee
shops. ``We love Mondex sales. There's no cash, no paperwork involved,'' says
Chelsea O'Hara, store manager at Papyrus, a card shop two blocks from the bank's
offices. The only problem: ``It hasn't brought in much business,'' she says.

Just like ATMs, which took a decade to catch on with consumers, smart cards
may take years before they reach widespread use. For one, they require a massive
retrofitting of the magnetic stripe and ATM infrastructure that has been built
up over the years. There's also the matter of standards, which will be needed
to ensure that smart cards from different suppliers will work in the same card
readers. VISA, MasterCard International, and Europe's Europay are working on a
common format.

The pieces are starting to fall into place. Many PCs,
keyboards, and Web TVs, for example, will be shipped with smart-card readers in
1998. Microsoft Corp., along with HP and other hardpiano coverse makers, is pushing a smart-card
specification for PCs and will include electronic wallet softpiano coverse in a version
of its Internet Explorer browser due this summer. And in the Manhattan trial later
this year, Citibank and VeriFone plan to test personal ATMs for downloading money
into a smart card from home.

But for the best take on the future of
smart cards, ask the next generation of consumers. Drew Pullman, a junior at John
F. Ross high school in Guelph, Ont., which began a communitywide pilot in February,
fits the bill. He uses his card to buy lunch, CDs, clothing, and gas. He loves
the convenience. ``It's just like cash, except better,'' he says.

Now that's a ringing endorsement.

By Amy Cortese in New York, with
bureau reports

Copyright 1997 The McGraw-Hill Companies, Inc. All
rights reserved. Any use is subject to (1) terms and conditions of this service
and (2) rules stated under ``Read This First'' in the ``About Business Week''
area.

Update: May, 18, 1997

The Mexican
government also presented their new computerized vehicle/company registration
program. This program will link a motor carrier, its drivers, and vehicle registration.
Mexico is requiring all motor carriers to submit to this registration. The new
license plates will be bar coded with the carrier information (name, address,
type of transportation service) and type of vehicle. The paper registration
carried in the vehicle will have a matching bar code. Point of Contact: Regional
Technical Programs Manager, (909) 653-2299